Income from an employment contract, a contract of mandate, a graduate traineeship, a student internship and maternity allowances are all covered by ‘youth relief’ – a tax exemption for individuals under 26 years old, designed to support young workers entering the labour market. However, remuneration for the transfer of copyrights is classified as income from property rights, which is not covered by this relief.

If royalties are not separated from the ‘basic’ remuneration in the assignment contract, the entire payment is considered income from property rights rather than from the assignment contract. This means that the remuneration would not qualify for ‘youth relief’ and would be taxed under the general rules. The principal is required to withhold an advance on income tax for the remuneration, applying a 50% deduction of the author's costs. In the PIT-11 form, the contractor’s total remuneration should be declared as revenue from property rights. 

This comes from a Supreme Administrative Court ruling dated 26 February 2025 (ref. II FSK 740/22). The court confirmed that, in order to safely benefit from both the youth relief and the 50% of copyright-related costs, the remuneration must be clearly divided into separate amounts for the transfer of copyright and the execution of the order. This distinction should be explicitly stated in the contract. This practice should also be applied to employment contracts.

Find more in the PRO HR March 2025.